So, last week I said the lows had been made in the grain markets this fall. Call it the harvest low. Call it the exhaustion low. Call it the outside market low. Call it one more win for blind hogs everywhere. Yes, they say even a blind hog finds an acorn sometimes.
At risk to what is left of my reputation after following this record market up and down for a year, I point out that I am right this time. Maybe I had better say I am right for a week this time.
Just when it looked like grains were going to go to zero, they have used the revised Crop Production and Supply and Demand Reports to put in a bottom. Sadly, there is nothing in the markets to indicate a return to what we now know are high prices.
No more $7.50 corn
Back in the day, we thought $3.50 corn was a high price. Now we know the $7.50 corn is a high price and $3.50 does not cover the cost of production, run up in a race for inputs to increase corn acres.
In the last few days we have seen December corn futures bounce off the 3.68 3/4 low by 52 cents. That would be exciting if it were not for the huge drop ahead of that bounce.
The end of September, the recent December futures high was 5.72 1/2. We dropped just over $3, then gained 52 cents, then lost 14 of that. Still, we are overnight 38 cents off the harvest low.
In the same basic time, November futures bounced 1.13 3/4 from the harvest low, then drifted 14 cents lower to the overnight Monday night. The drop from the Sept. 22 high of 12.12 was nearly $4 to the end of November low. Since then, we have bounced a dollar.
December wheat made a recent high of 7.60 on Sept. 24, then lost $2.57 cents. The good news is that it has been up most days in the last week, and is now nearly 62 cents off the low.
So, the news is not good. We have cheap prices compared to our costs, and cheap prices compared to our summer highs, back when there were no buyers. But, the lows are holding, at least for this week, and prices have improved dramatically.
Ohio harvest strong
As for the pace of harvest, Ohio is ahead of normal, even if it does not seem that way. The nation as a whole continues to lag. The Ohio corn harvest is at 70 percent as of Sunday night. This is just under the 72 of last year, and an improvement of 15 percent in a week. The five-year average is 59 percent at this time.
The nation, or the major 18 states, which is what we watch, is only at 55 percent. We did 16 percent last week, but are way off last year’s 83 percent and the average of 79. I would expect this to be the week we catch up, with great weather over most of the country.